I would have BF mention to his dad that you'd like to pay for the tree this year. If his father insists on giving you the tree for free or at a discount then there are no worries. You can always tip if you choose to make it less awkward.

DH and I usually do some bartering when it comes to friends/family businesses. My BFF and her husband own a photography studio. They did DS's high school graduation pictures for a discount and DH installed some computer stuff for them at a discount. Is there any possibility you could do something like that with the owner?

Sorry for any confusion about the tree -- I did mean "live tree" vs. "fake tree." Before last year, I had used an artificial tree the previous few years when I lived in an apartment by myself.

Thanks so much to everyone who offered advice. For our particular situation, it seems the option that makes the most sense is for my boyfriend to just tell his dad when we're planning to come get a tree, and add that we want to pay for it, with something like Toots' wording. I asked my BF if he'd be comfortable doing that and he said he thought it would be okay. (We're probably not going to get our tree until December 8 -- growing up, my family never picked out our tree until a couple weeks before Christmas, at the earliest, so that's not particularly late for me.)

Update: So my BF texted his dad Saturday morning to say we were planning to come buy our tree that day, and his dad texted back that he'd be at the lot all afternoon, and then (I think) my BF texted something to the effect that we wanted to pay for our tree, and there was no response to that. When we got to the lot, it turned out his dad and all three siblings were there, and his youngest brother and sister (both tweens) were very eager to help us find a tree. As it happened, after we'd almost settled on one, the brother pointed out another tree that had JUST been put on display, and didn't have a price tag yet. It was a very nice tree, so we ended up taking that one.

His dad put it on my car, and as he was finishing up I asked how much I owed, and we said again that we weren't expecting it for free and would be happy to pay full price, and he said how about half off? We said that sounded good and I paid, and then I gave tips (very nice ones, in part because of what bills I happened to have in my wallet) to his brother and sister, which my BF said made their day.

As is my natural tendency, I worried a bit afterward that I'd screwed up somehow, but my BF said I was fine, and it was definitely a lot more fun saying hello and buying a tree with his family than from some random guy at another lot, and we have a great tree! So it all seems to have worked out. Thanks again for the advice, it eased our anxiety a lot.